Annual report pursuant to Section 13 and 15(d)

Related Party Transactions

v3.21.1
Related Party Transactions
12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

4. Related Party Transactions

 

The Company’s principal office facilities are being provided without charge by Dr. John S. Kovach, the President and Chief Executive Officer. Such costs were not material to the consolidated financial statements and accordingly, have not been reflected therein.

 

In September 2007, the Company entered into a consulting agreement with Gil Schwartzberg for Mr. Schwartzberg to provide financial advisory and consulting services to the Company with respect to financing matters, capital structure and strategic development, and to assist management in communications with investors and stockholders. In January 2014 and August 2018, the Company entered into respective amendments to this consulting agreement, which have extended the consulting agreement through January 28, 2024. Consideration under this consulting agreement, including amendments, has been paid exclusively in the form of stock options. Mr. Schwartzberg is currently a significant stockholder of the Company and continues to be a consultant to the Company.

 

Legal and consulting fees charged to operations for services rendered by the Eric Forman Law Office were $38,000 and $48,000 for the years ended December 31, 2020 and 2019, respectively, excluding amounts paid to Mr. Forman pursuant to an employment agreement during 2020 (see Note 7). Eric Forman is the son-in-law of Gil Schwartzberg, a significant stockholder of and consultant to the Company, and is the son of Dr. Stephen Forman, a member of the Company’s Board of Directors. Julie Forman, the wife of Eric Forman and the daughter of Gil Schwartzberg, is Vice President of Morgan Stanley Wealth Management, where the Company’s cash is deposited and the Company maintains a continuing banking relationship.

 

Robert N. Weingarten was appointed as the Company’s Vice President and Chief Financial Officer on August 12, 2020. During the year ended December 31, 2020 (prior to his appointment as Vice President and Chief Financial Officer), the Company paid Mr. Weingarten a total of $79,995 for accounting and financial consulting services rendered with respect to the preparation of the Company’s consolidated financial statements and certain other financial and compliance matters. During the year ended December 31, 2019, the Company paid Mr. Weingarten a total of $80,380 for similar accounting and financial consulting services rendered. These amounts are excluded from the summary of related party costs presented below.

 

A summary of related party costs for the years ended December 31, 2020 and 2019 is as follows:

 

   

Years Ended

December 31,

 
    2020     2019  
             
Related party costs:                
Cash-based   $ 284,451     $ 108,000  
Stock-based     480,634       314,631  
Total   $ 765,085     $ 422,631  

 

Stock-based compensation arrangements involving members of the Company’s Board of Directors. officers and affiliates are described at Note 5.

 

Additional information with respect to cash compensation paid to the Company’s officers during the year ended December 31, 2020 pursuant to employment agreements are provided at Note 7.